The ongoing pandemic has affected the growth of all sectors and real estate is no exception. With property sales showing almost nil growth, prices of housing properties have certainly taken a hit. This has led to NRIs showing keen interest in acquiring properties in Mumbai. Serious enquiries have started pouring in and property agents have got busy scouting properties across Mumbai for their NRI clients. Investing in property has always been a favourable option for NRIs, as they have their own house to stay once they come back. Also, till the time they are abroad, they let the apartment out on rent and earn rental income. In this article, we will share with you, some guidelines for NRIs to invest in property in India. rustomjee yazarina dadar
How NRIs can fund their property purchase
NRIS can fund their property purchase in Mumbai by remitting funds in India, either through regular banking channels or through the balance in their NRO, NRE or FCNR bank accounts. NRIs can also avail of a loan from a bank or housing finance company to partially fund their property purchase. The rules for this loan will be the same as applicable to resident Indians. NRIs can pay the EMIs of their loans either from the funds held in their FCNR, NRO or NRE bank account or through inwards remittances from their country of residence. rustomjee yazarina dadar parsi colony
Property purchase process for NRIs
NRIs have to mandatorily purchase their property in Mumbai through a registered conveyance deed. In the instance of the NRI not being physically present in Mumbai at the time of registration, they have the option of executing a power of attorney in favour of someone in their immediate family whom they trust, who can then legally execute all documents pertaining to the property deal. This power of attorney will also help the NRI in giving the property out on rent without being physically present for signing the rental agreement.
Why NRIs prefer Mumbai for property investment
NRIs are habituated to a certain level of lifestyle in their country of residence, with many of them living in posh localities and experiencing high-level amenities and conveniences. When they set about buying a property in India, it is but natural that they look for cities which offer them the quality of living. Which is why, Mumbai is their first option for buying a property. Mumbai has one of the best standards of living and quality infrastructure, along with exceptional business, employment, education and entertainment opportunities. After living abroad for decades, NRIs can smoothly adjust to an equivalent lifestyle in Mumbai and continue living a rewarding life without any regrets.
Property sale process for NRIs
According to government rules, an NRI can sell his/her property either another NRI, a PIO (Person of Indian Origin) or a resident Indian citizen. However, if the NRI is selling agricultural, farming or plantation land, then it can be sold only to a resident Indian citizen. No special permission is required to sell the property, if the NRI has inherited it from a resident Indian. However, if the property is inherited from an individual who is not of Indian origin, then the NRI has to mandatorily seek permission for sale from the Central Bank. If the NRI cannot be physically present in India at the time of sale, he/she can give a power of attorney to a trustworthy person for selling the property. The NRI will have to pay short term capital gains tax if the property is sold within 2 years of purchase, and long term capital gains tax if it is sold after 2 years of purchase. However, if the NRI invests the sale proceeds either in another property or capital gains bonds, then he/she would not be required to pay any capital gains tax.
To conclude, Mumbai offers excellent an excellent opportunity for NRIs wanting to purchase property at attractive prices, either for self use or earning rental income.